Five Levels of Estate Planning


The five levels of estate planning is an organized approach for describing estate planning in a manner that you can easily follow.

Level One: The Essential Plan

The problem for level one planning is the facts that you haven’t any will or living trust in place, or your existing will or living trust is outdated or inadequate. The objectives because of this kind of planning are to:

– reduce or eliminate estate taxes;

– avoid the cost, delays and promotion associated with probate in case of death or incapacity; and

– protect heirs using their inability, their impairment, their lenders and their predators, including ex-spouses. For more information regarding estate planning, you can also navigate to

Level Two: The Irrevocable Life Insurance Trust (ILIT)

The problem for level two planning is that your estate is projected to be higher than the estate-tax exemption. Since there is a present-day lapse in the estate and generation-skipping transfer taxes, it's likely that Congress will reinstate both taxes (maybe even retroactively) sometime this year.

Level Three: Family Limited Partnerships

The problem for level three planning is the fact that you have a projected estate-tax responsibility that exceeds the life insurance purchased in level two. If the $1 million gift-tax exemption is employed to make life-time gift items, the gifted estate and everything future understanding and income on that estate are removed your estate. You can also read this and know more informaton regarding helath care benefits.

Level Four: Qualified Personal Residence Trusts and Grantor Retained Annuity Trusts

The problem for level four planning is the excess need to lessen your estate after your $1 million/$2 million gift-tax exemption has been used. Although paying gift idea taxes is less costly than paying estate taxes, most people do not need to pay gift taxes.

Level Five: The Zero Estate-Tax Plans

Level five planning is a desire to "disinherit" the IRS. The strategy combines presents of life insurance coverage with products to charity. For instance, take a wedded couple, both era 55, with a $20 million estate.

Assume that there surely is neither development nor depletion of the resources which both spouses expire in a 12 months when the estate-tax exemption is $3.5 million, and the top estate-tax rate is 45%.